ARE&M - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.8

📊 Fundamental Analysis Summary

ARE&M (likely referring to a company in the engineering or infrastructure space) presents a moderately attractive long-term investment case, with solid fundamentals, low debt, and reasonable valuation. However, recent profit contraction and declining institutional interest suggest caution. It’s best suited for investors seeking value with moderate growth potential.

Metric Value Interpretation

P/E Ratio 21.5 Below industry average — undervalued relative to peers

PEG Ratio 1.17 Fairly valued — growth expectations aligned with price

ROE / ROCE 11.9% / 16.2% Decent — not exceptional, but stable

Dividend Yield 1.06% Modest — adds passive income

Debt-to-Equity 0.04 Very low — strong financial health

EPS ₹51.6 Solid earnings — supports valuation

PAT Growth (QoQ) -29.7% Significant decline — earnings under pressure

Book Value ₹404 Price-to-book ~2.5× — reasonable for capital-intensive sector

RSI / MACD 52.1 / +2.34 RSI neutral; MACD mildly positive — consolidation phase

DMA 50 / 200 ₹992 / ₹1,062 Price below 200-DMA — short-term weakness

52W Price Range ₹805 – ₹1,680 Currently near lower end — attractive for accumulation

FII/DII Change -1.32% / -0.59% Institutional selling — sentiment risk

📉 Ideal Entry Price Zone

Entry Zone: ₹940 – ₹980

Near 50-DMA and technical support.

Accumulate gradually if RSI stays near 50 and MACD flattens.

🧭 Exit Strategy & Holding Period

Holding Period

3–4 years — suitable for value-oriented long-term investors.

Exit Strategy

Consider partial exit if PEG rises above 2.0 or ROE stagnates below 10%.

Reassess if price exceeds ₹1,300 without EPS or PAT recovery.

Key Metrics to Monitor

PAT growth returning to positive territory

ROCE improving to 18%+

PEG ratio trending below 1.0

Institutional interest stabilizing or improving

🧠 Final Thoughts

ARE&M is a fundamentally sound stock with low financial risk and reasonable valuation. While not a high-growth compounder, it offers stability and moderate upside. Ideal for long-term investors who value capital preservation with steady returns.

Would you like a comparison with similar mid-cap engineering or infra stocks like KEC International or Kalpataru Projects?

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